Bitcoin saw the biggest drop of this year, returning it to levels it hadn’t seen since January, falling at one point to just over US $30,000. The past week has seen large amounts of selling of the cryptocurrency and value had dropped to less than half of its peak price last month of $64,829. Bitcoin experienced a 30% drop in value but has since seen a little recovery. From the highest point to the lowest point of the week there was a 40% fluctuation though as of this writing prices are hovering back around $40,000.
The drop in Bitcoin value all but erases the cryptocurrency’s surge when Tesla purchased $1.5 billion Bitcoin and this loss in part due to Tesla’s recent announcement that they will no longer accept Bitcoin. That statement came as Tesla’s Elon Musk cited concerns that mining Bitcoin is an environmentally unfriendly process. Over $300 billion was estimated to have been lost in crypto markets based on that statement.
The Bitcoin drop was mimicked by other currencies such as Ethereum falling 22% and Dogecoin tumbling 25%. Ironically Dogecoin also experienced a surge thanks to Elon Musk and a massive drop during his subsequent Saturday Night Live appearance on American television. Musk did hint that Tesla was not selling off their Bitcoin which may have helped recover the market a little.
While Tesla’s flamboyant leader gets a lot of attention regarding the Bitcoin drop, a much bigger issue for the future of cryptocurrency is taking place in China. On Tuesday 3 major banking and payment institutions in China warned in a statement released on social media against trading cryptocurrency or conducting business using Bitcoin as payment.
In the joint statement, the Payment and Clearing Association of China, the National Internet Finance Association of China, and the China Banking Association, said that the volatility of cryptocurrency, like this recent drop in Bitcoin and other cryptos, can seriously affect people’s assets and disrupt the national economy. They pointed out that Chinese law offers no protection against crypto losses, and that trading itself is illegal for financial institutions and payment providers in China.
The country has long been anti-cryptocurrency, having previously banned crypto IPO rollouts and shut down Chinese cryptocurrency exchanges. The massive Chinese market had been a dominating factor in cryptocurrency, at one point posting about 90% of the global cryptocurrency trades, but the government’s continued crackdowns have somewhat reduced their sway.
Chinese fears of money laundering brought about the banning of cryptocurrency trading 2 years ago. At the same time, the central bank has been pushing its own crypto-currency, digital Yuan, which it has piloted around the country as a heavily regulated domestic crypto option. Critics say that the Chinese attitude towards cryptocurrency is expected as China struggles to maintain capital control, a problem severely exacerbated by digital currencies. An effort to stop people in the country from using crypto to move their cash abroad has driven crypto investors out of China.
Crypto experts believe that this week’s plummet is only a small setback for the future of Bitcoin and that market volatility is a normal characteristic of cryptocurrency investment. They say that fluctuation like this is not unusual despite the scary figure of 250 billion dollars lost in the Bitcoin market drop last week. Experts are quick to point out that Bitcoin is operating on a large scale now and it’s still up 30% this year and over the past 12 months has skyrocketed 300%.
Join the conversation and have your say on Thailand news published on The Thaiger.
Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.
Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.